Author Archives: Steve Kamman

Someone Just Farted at The Dinner Party – “US COVID-19 inflation is predominantly a sellers’ inflation [by] firms with market power to hike prices…”

I’m not pushing some bolshevik agenda here.  The mechanics do matter.  If price increases led us into inflation, then price cuts might just lead us out?  A downward spiral of price-cutting would be great for inflation, consumers, and the economy … Continue reading

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IMF Says (Politely) The Monetary-Policy-Only Experiment is Failing… Hubris/Nemesis, Sampson, and The Battle of Isandlwana.

The real economy is clearly slowing.  But it may not be slowing fast enough to save Team Monetary Policy.  Says who?  The IMF.  After Hubris comes Nemesis… The IMF’s revised forecast tells us the rate-rising fiesta risks damaging the financial … Continue reading

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Higher Labor Costs Drive… Productivity Gains! Which Create Wealth. Inflation Can Do Good. IF You Let the Free Market Do Its Work.

We live better now because Agriculture went from ~95% of the workforce in the 1800’s to about 2% today.  How did that happen (mostly)?  Labor got expensive.  The industrial revolution gave people higher-paid, more attractive options to back-breaking stoop labor. … Continue reading

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The Market Myth of an All-Powerful Fed is Looking Pretty… Mythical.

18 months into one of the fastest, steepest Fed hiking cycles in history, the market myth of an all-powerful Fed is looking pretty… mythical. A year ago, “Team Interest Rate” was predicting economic Armageddon in January 2022 whilst expecting a … Continue reading

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Maybe the Market’s Forecast is More “Banking Crisis Avoided” Than “Deep Recession Ahead?”

The market is betting the Fed will have to cur rates by September-December 2023. We don’t (yet) know if the market is pricing in a fast drop in other economic sectors.  Many commentators (and the Fed’s own projections) expect a … Continue reading

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Why “Higher For Longer” = “The Fed Calling In an Airstrike on Its Own Positions”

For devotees of the (missing and suspected dead) Phillips Curve cargo cult, the Fed can’t stop raising rates until we see major unemployment.  I do not share their faith in the defunct Phillips Curve or an all-powerful Fed.  I agree … Continue reading

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Will The Fed Destroy Banking And CRE To Get The Unemployment Everyone Is Looking For?

A lot of people expect the Fed to keep raising rates to drive “the economy” into a recession.  They don’t give much thought to the route we’d take to get there;  What sub-sectors of the economy are (or are not) … Continue reading

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Is the Market Expecting a Recession? Or The Fed Heading off a Bank (and Real Estate) Crisis?

Markets now see a a 97.6% chance of a Fed rate cut by September 2023.   Market consensus is “the Fed will have to cut rates because we will have a recession.” But what if we get a rate cut … Continue reading

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A Fed/Treasury Compact? If So, Rate Rises are Mostly Done. The Logic Of Mutual Assured Destruction.

This was supposed to go out Tuesday night, but the power went out here.  It still holds pretty well.  Addendum:  The Fed did raise rates 25 bps, but made noises about slowing down etc…. In “potential bar fight” terms, the … Continue reading

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Crash or Growth Ahead? Assets Probably Can’t Squirm Out of Taking Damage Either Way…

Looking ahead, we probably face either (mild) inflation or debt deflation.*  Both leading to the same place.  Losses on assets. * [Debt Deflation] = deflation, causing people to default on their consumer loans and mortgages. Bank assets fall because of … Continue reading

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